Should you purchase your own malpractice policy? To shamelessly riff off of Shakespeare's oft-quoted line, that is the question. Let us begin with the assumption that you are covered by an employer-paid policy. If, perchance, you are not, get thee forthwith to ye insurance company and buy one. Malpractice coverage is vital.
Playing the Odds
What are the odds of your being involved in a malpractice action? In 2011, approximately 180,233 nurse practitioners were in practice in the United States.1 Yet from 2002 to 2012, only 2,654 malpractice claims against NPs were paid.2 Spread out evenly over that 10-year period, there was a 0.15% chance that you might have ended up on the liability side of a claim.
So, with such a small chance of being sued, why pay premiums out of your own pocket? The next section outlines compelling reasons.
Reasons to Buy
The average malpractice indemnity payment (judgments and settlements) has increased 19% since 2009, climbing from $186,282 to $221,852.3 The average cost to defend a lawsuit is now $63,792.3 More than $44 million was paid in indemnity and expenses for liability claims on behalf of NPs from 2007 to 2012.3
Although 61% of licensing board actions against nurse practitioners resulted in no action between 2007 and 2012, 3.1% of licensing complaints resulted in the end of the nurse practitioner's career.3 Seventy-three percent of NPs involved in professional liability claims have worked for more than 11 years, which indicates that the longer one practices, the greater the risk of experiencing a claim.3
Hospitals and physicians are perceived as the "deep pocket" defendants in malpractice cases, and rightfully so. But NPs provide substantial care to patients, and plaintiff lawyers will include you if they feel your actions merit inclusion.
Employers pay for policies to protect themselves. Those policies protect the financial well-being of the institution, and they should not be misconstrued as an employee benefit. If there is a conflict of interest between you and the institution, you may be left hanging to protect the employer. The lawyer who is "representing" you pursuant to an employer policy understands that legal fees are paid from the premiums paid by the employer, not you. There is a bias to take care of the institution and not necessarily to protect your rights and reputation.
You probably will never know the terms of your employer's policy. It may, for example, only cover you for "claims made" instances. In that event, should you leave your employer prior to a lawsuit being filed against you, you would not be covered by the employer's malpractice policy.
When covered by an employer's policy, you are only covered for acts committed within the scope of your employment. A curbside consult with your neighbor is not covered, yet that neighbor could sue you later.
If your license ever is called into question by your state board of nursing, your own policy will pay for a lawyer to represent you. The expense of hiring an attorney to represent you in such a scenario is expensive, although it probably will not wipe you out financially.
This is your profession, your livelihood. Without a license, you would have to find another type of work.
If you purchase a personal policy, you will always have your own lawyer to assist you. Being insured does not make you a target, nor does not being insured insulate you from inclusion in a lawsuit. Plaintiff lawyers have no idea which providers have private insurance at the time they file a lawsuit, but they will learn of it in the discovery process.
Should you be found liable in a malpractice lawsuit and you do not have insurance, the award could wipe you out financially.
When You Buy
If you choose to purchase an individual malpractice policy, select one that is an "occurrence" as opposed to a "claims made" policy. The latter only protects you against claims made during the policy period. The former will protect you for years after the event, even if you are no longer employed at the place where the incident occurred.
Yes, malpractice insurance is expensive. No one likes to pay for insurance, yet we pay for homeowner, automobile and life insurance policies. When a claim arises, we're happy we did.
1. The Henry J. Kaiser Family Foundation. State Health Facts. http://kff.org/other/state-indicator/total-nurse-practitioners/
2. Department of Health and Human Services. The National Practitioner Data Bank. NPDB Research Statistics. http://www.npdb.hrsa.gov/resources/npd
3. $44 Million Paid in Nurse Practitioner Claims Over Past 5 Years: Report. Claims Journal. http://www.claimsjournal.com/news/national/2012/11/27/218080.htm
A.J. Ullman is a family nurse practitioner at Ohio's oldest federally qualified health center, The HealthCare Connection in Cincinnati. In addition, he is a licensed attorney and the owner of A & A Legal Nurse Practitioner Consultants, Inc., which provides medicolegal consulting to lawyers.